Never mind the overall environment or the fluctuating economic trends, India’s real estate market has only become stronger over the past few years and the prices have been steadily rising across the spectrum.
In the past one year alone, while residential rates have gone up by 5-15 per cent in metros and tier-II cities, some areas have registered much sharper growth. Significantly, there is still enough scope for appreciation in select locations.
According to a Cushman & Wakefield India report, Indian property has seen a rise in capital values in most micro markets. Baner in Pune saw the highest year-on-year price appreciation of 57 per cent, followed by Central Bengaluru (44 per cent) and Gurgaon (35 per cent).
“As most of the mid-range projects are located in the suburbs and peripheral areas, where the overall cost of an apartment is lower, consistent demand from endusers and investors has been pushing the values higher,” says Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield.
With inflation and construction costs moving up, price trends are changing. “Smart residential property investment will mean identifying the right products priced below Rs4,000 (about Dh270) per square foot in key growth cities and select properties at even higher price points in the high-end segment,” says Om Ahuja, CEO — Residential Services, Jones Lang LaSalle India.
We take a look at the outlook for a few hotspots.
BENGALURU
Even in a city such as Bengaluru, the maximum scope for appreciation is in the high-end property segment. Prices in Central Bengaluru witnessed a whopping appreciation
of 44 per cent last year owing to high demand and low availability.
“IT-centric cities such as Bengaluru, Pune — and to an extent Chennai — are now emerging as whole new residential real estate propositions. IT companies there are expanding their campuses dramatically and data trends suggest that dynamics in these cities will be very different in the next few years,” says Ahuja.
He adds that people looking to invest can still find lucrative residential projects at different price points in Bengaluru for long-term investment and good appreciation.
PUNE
Pune witnessed healthy appreciation in the values of both high-end as well as mid-range properties. Besides Baner, fast-developing areas such as Wanowrie, Kharadi and Hadapsar have registered maximum appreciation in the recent past and offer good scope for appreciation in the next few years.
“The presence of commercial hubs in Kharadi-Hadapsar and Wanowrie has led to an increase in capital values for both high-end and mid-range segments. With the walk-to-work concept popular among the IT/ITES employees and development of the Outer Ring Road along with allied social infrastructure coming up, the appeal of locations such as Wagholi and Hinjewadi as residential catchments is likely to gain further importance,” says Dutt.
CHENNAI
While Chennai saw the highest overall price increase of 16 per cent in mid-segment properties across India, its high-end segment in Anna Nagar witnessed appreciation of 33 per cent in the past one year. “While revision of circle rates coupled with upcoming projects makes Anna Nagar an attractive proposition for investment in high-end properties, Kilpauk, which recorded an appreciation of 24 per cent last year, is another good location,” says Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield.
MUMBAI
In Mumbai, while far-flung suburban areas such as Navi Mumbai and Vasai-Virar have seen a steady rise in prices, the healthy appreciation of high-end properties offers investors good return on investment. Luxury projects in central Mumbai areas such as Parel, Sewri and Worli are the best bets, considering that new
office complexes coming up in the area will drive economic activity.
“While there is a relative slowdown in the price-conscious mid-segment and affordable homes [sector], premium homes continue to find favour with high-end local buyers, expatriates and NRIs,” says Boman Irani, Secretary, Maharashtra Chamber of Housing Industry, adding that the premium segment is expected to get maximum appreciation in the
short term.
NCR
While all locations in the National Capital Region (NCR), saw a rise in capital values, its high-end category recorded an increase of 22 per cent while mid-range homes recorded a rise of 15 per cent in the past one year. “Gurgaon’s luxury properties appreciated by 42 per cent in the past one year alone, on account of higher demand of new locations such as Dwarka Expressway, southern peripheral road and golf course extension,” says Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield.
